Top Texas Realtors Who Failed to Pay Taxes Could See Jail Time
For 12 years, Eleanor was Coldwell Banker's top-selling Texas Realtor, and she seemed to have every ingredient necessary to become a local Dallas real estate star. Her entry into the business was an inspirational "dumped divorcee rags- to-riches" tale, and Eleanor was a formidable saleswoman from her very first closing.
But once she met and married Nicky Sheets, son of a wealthy Odessa, Texas, eye surgeon and ostrich rancher, the two teamed up as business partners and took over the town. They produced more than 100 million in annual sales. In November 2007, she ranked 17th in the nation with real estate sales of $171 million. From 1997 to 2003, Nicky and Eleanor cleared more than $9 million in commissions during the best real estate market that Texas has ever seen. It seemed there was nothing they could not accomplish, together.
Now the fate of both licensed real estate agents -- their Texas licenses are still active and current --- rests in the hands of two Texas judges.
In March, Nicky plead guilty to individual and corporate tax evasion of $2.7 million, including penalties and interest -- a crime that carries a prison term of up to five years, as well as a fine of as much as $250,000. And just last week, the Dallas real estate world was rocked by the news that Eleanor, his wife of 18 years, had also plead guilty to even more charges than Nicky -- four counts of failure to pay income taxes. She faces up to four years in a federal prison and a $400,000 fine. Now the Dallas real estate community is wondering if Eleanor, the poster child of the successful, pull-yourself-up-by-the-bootstraps real estate agent, will be wearing her once signature orange in a federal prison jumpsuit.
It appears the Sheetses have come to the end of a long, wild ride that almost mimicked Case-Shiller charts: When the market seemed to be flying high on steroids and no end was in site, the Sheetses were closing homes hand over fist, serving some of Dallas' richest -- Mike Modano, Lamar Hunt, former Cowboys quarterback Drew Bledsoe, former Texas Ranger Mark Teixeira. Eleanor and Nicky even co-hosted a fundraiser in 2007 for Dallas Mayor Tom Leppert and listed their home, briefly.
They carefully developed a brand and hired the best marketers to promote it. Eleanor and Nicky worshiped at the feet of national real estate guru Howard Brinton, who taught the "team concept." She listened to inspirational tapes each morning and hired an industrial psychologist to train her staff. She was an early adopter of web technology, and the first Dallas agent to truly "brand herself" by appearing in ads showcasing homes for sale, as if her celebrity status was the draw. They even bought a moving van, painted it with their bright orange logo, and offered clients white-glove moving help if they chose the Sheets team as their agents. They loaned that van to charities, hired a chef to cater a buyer's first dinner in a new home, had an on-call carpenter for home repairs, and used decorators to stage furniture long before it became de rigeur --- anything to get a listing.
Several Dallas Realtors have told me that she also undercut other agents by taking lower commissions.
Eleanor dressed for success in Neiman Marcus couture, and hired experts to style and make her up for her numerous photo shoots. If you lived in Dallas you saw her orange billboards everywhere. Nicky began flying planes, not an uncommon hobby in Texas where cities are spread so far apart. On the surface, life seemed to be better than Hollywood.
But underneath, the empire was crumbling. The couple either couldn't or didn't pay bills. Left unpaid were caterers who fed their guests at open house parties, other agents and vendors such as photographers and graphic designers, and even "The Hamburger Man."
And Nicky had other "problems": He was arrested during an undercover sting operation in September 2000 for soliciting prostitution -- Dallas police officers posed as hookers. Somehow those charges didn't stick and were not publicized in the local news. In 2001, Nicky was threatened with jail time for refusing to file his 2000 tax returns. And as for that plane, Nicky sent his lawyer to Odessa for a court hearing in a plane owned by one of his "shell" corporations, JNS Investments. A creditor who had suffered losses in the ostrich business with Nicky sent his lawyer after the plane, "but by the time he had tracked it from a recently vacated hangar... it had been repossessed."
The pair lived in a home that was modest by Texas millionaire standards: a $1.75 million, 5,000-square-foot country French home with a little yard on a cul de sac, in the less tony part of Preston Hollow but still not too far from the new home of President George and Laura Bush. The Sheets vacated the home for the IRS, who failed to sell it at auction. The home has since been reduced to almost half of the original asking price. I am told that four serious buyers are circling.
While they await sentencing, Nicky and Eleanor are reportedly living in a rental home north of Dallas. In the Department of Justice's release, Eleanor states she she "agrees to pay restitution for all criminal conduct relating to the offense charged in the criminal information, including, but not limited to unpaid taxes and any costs associated with her prosecution." That indicates to many Dallas Realtors that Eleanor is about to come clean and put all her trust in God, perhaps in time to promote a memoir. She and Nicky have frequently been spotted in church, listening attentively to the pastor.
Which is all very ironic. More than 20 years ago, Eleanor had to sell her house to keep the taxman at bay, one of the reasons why she became a Realtor.
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